Good morning. My name is Matthew and I will be your conference operator today. At this time, I would like to welcome everyone to the Hilton Worldwide Fourth Quarter and Full Year 2013 Financial Results Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator Instructions) Thank you. Christian Charnaux, Vice President, Investor Relations, you may begin your conference.

Thank you, Matthew. Welcome to the Hilton Worldwide fourth quarter and full year 2013 earnings call. Before we begin we would like to remind you that our discussions this morning will include forward-looking statements. Actual results could differ materially from those indicated in the forward-looking statements, and forward-looking statements made today are effective only as of today. We undertake no obligation to publicly update or revise these statements. The factors that could cause actual results to differ are discussed in our SEC filings. You can find a reconciliation of the non-GAAP financial measures discussed in today's call in our earnings press release and on our website at www.hiltonworldwide.com. This morning Chris Nassetta, our President and Chief Executive Officer will provide an overview of our year-end results and will describe the current operating environment, as well as the company's outlook for 2014; Kevin Jacobs, our EVP and Chief Financial Officer will then provide greater detail on our results and outlook. Following their remarks we will be available to respond to your questions. With that, I am pleased to turn the call over to Chris.

Thanks, Christian, and thank you all for joining us today. We are certainly very excited to be back in the public markets and to be hosting our first earnings call, following our IPO in December. We are also very pleased with our performance for last year, highlighted by our system-wide RevPAR growth of 5.2%, and our full year adjusted EBITDA of $2.21 billion, which is a 13% increase year-over-year. I'm sure many of you have heard some version of our story on our various road shows. But for those that have not and at the risk of making this call little longer than normal, I thought I briefly highlight our investment pieces before getting into our 2013 performance and our outlook for 2014. When I joined the company in 2007, at the time of the Blackstone acquisition we were presented with once in a lifetime opportunity to take a nearly 100 year old company that had once been a clear leader in this space but had become complacent and return that company to a leadership position. Many of the pieces were there, including a portfolio of distinct brand, spending all the major customer segments, and strong commercial engines that were delivering good results for owners, but we were an average performer at that on the top-line margins, bottom-line and met unit growth. As an enterprise we certainly were not optimized or aligned strategically. So the first thing we did was to get intense alignment of our organization around a common vision, mission, values, and set up key strategic priorities. Well our work in this regard will never be done we have successfully transformed our business into what is now a lean and unified organization over the performance driven culture. This has enabled the new Hilton Worldwide to outperform our competition,…

Thanks, Chris, and good morning everyone. As Chris suggested, we are very pleased with our results for both the fourth quarter and full year, which exceeded our expectations. We were also thrilled with what we were able to accomplish last year in the capital markets, completing both our debt refinancing and of course our IPO. I will speak in more detail for the refinancing and IPO in a little bit and then we'll get into our 2014 outlook a bit more. But first let's talk about our fourth quarter and full year 2013 results. Adjusted for special items, EPS was $0.53 for the full year 2013, compared to $0.45 in the prior year, an increase of 18%. Prior to adjustments net income was $415 million for the full year 2013, compared to $352 million for 2012 or $0.45 per share and $0.38 per share respectively. For the fourth quarter, adjusted for special items, EPS was $0.11 compared to $0.10 in 2012. Prior to adjustments net income was $26 million, compared to $61 million in 2012 or $0.03 per share and $0.07 per share respectively. Special items that have been adjusted in both our fourth quarter and full year results include a one-time charge of $306 million associated with the conversion of our private company compensation plan for senior management into stock at the IPO, which was paid entirely out of Blackstone's ownership in the company and not dilutive to shareholders. In the fourth quarter, we recognized a gain on the extinguishment of our prior debt of approximately $230 million and the release of a tax valuation allowance of approximately $90 million net, as low as the GAAP tax benefit on all of those special items. Adjusted EBITDA for the fourth quarter was $603 million, an increase of 16% over 2012…

(Operator Instructions) Your first question comes from the line of Joe Greff with JP Morgan.

Hi, Joe.

Welcome back. Looking at your 2014 EBITDA guidance and other outlook components how does that translate into free cash flow multiple debt reduction for the year? In other words, it is what other non-cash add-backs or the working capital items are there to drive your free cash beside the simplistic method EBITDA less interest less taxes less CapEx?

I think that gets you pretty close to the right number. I mean I'd say that based on the sort of range of outcomes, it's about $700 million to $900 million, roughly that should be available for debt reduction in the year.

And then the upfront cash that you get from monetizing the land and your rights at the Hilton Hawaiian Village how much is that I know Kevin you mentioned what's the net present value of that?

The land sale component of it is $25.4 million and then the rest of the MPV is in the sales and marketing and operating agreements that we're entering into.

Chris, earlier you painted a generally optimistic picture for net unit growth. Can you just talk about the mood in the hotel development community specifically in China right now I guess what markets are there with positive momentum and for what demand, how does China generally feel?

Yes, I mean -- I'd say still not withstanding the GDP growth is moderating a little bit and they -- and China is clearly been trying to make sure that they don't end up with a real estate bubble. It's clearly still generally pretty positive. There was a period of time I would say sort of in the first half of last year where China development really slowed down. It picked up pretty materially, it didn't get back to the peak levels but it picked up pretty materially in the second half of last year, and what we see so far in China in the beginning of this year and we said in our Investment Committee Meeting in the last couple of weeks where we review all the deals we're doing. It feels -- it still feels pretty good. It is changing and so my comments about Hilton Garden Inn and my prepared comments and what we're doing with the launch of Embassy which will occur later in the year would put in those -- would put my comments for a reason and that is definitely to signal that there is change of thought I think. There's no question that full service and luxury we still have pretty good momentum in China, but the pace at which this new development is getting done I think in the market generally at the high end of the business as close somewhat and I think it's picking up in the midscale segment of the business. So we've been very, very focused on Garden Inn. We think Embassy has adapted for that market as a great sort of value play in the full service space that's going to play well. We haven't done it yet, but we haven't launched it yet, but we've been…

Your next question comes from the line of Harry Curtis with Nomura. Your line is open.

Yes, very good. I wanted to just focus on the U.S. for a minute. In the U.S., in 2013 you ended -- your occupancy ended at about 73% and you talked about group business in '14 being pretty strong. You really needed that this level of occupancy, what are your occupancy growth expectations for this year? And then the second part of the question is recently what have you been seeing in, in the quarter for the quarter group demand has that been much of a help or a headwind?

Yes, on the occupancy side listen it's a tail of mortgage and assets. So I think as you look at it 73% might -- we're going to have as Kevin suggested, we would probably have our RevPAR growth, you're going to have somewhere between half a point and a point of occupancy growth. You're certainly getting to the point where you don't need a lot more occupancy broadly in the system and my guess is that 60% to 70% rate growth figure that we get will be even higher next year. So I think we're getting from a cycle point of view to the point where as you're implying in your question, we want to be and we certain -- don't get me wrong, we're certainly focused on rates and we will be increasingly focused on rates, but there will be a little bit more broad sort of system-wide U.S. occupancy gain this year. Well that's basically come on the group side, if you look at on average 73% it's great but if you look at it sort of by individual segments particularly looking at the big group hotels, big commercial hotels they still have occupancy to go, because we are mid cycle in my opinion in terms of where we are broadly that is generally when you see the group business come back that's when you see these big hotels really start to perform as a result of building that, that that be. And I would say from the standpoint of the real big boxes and bigger markets unlike may be sort of the limited service in suburban secondary markets, there is more occupancy there. So you're not going to see a whole lot of occupancy and a lot of markets moving, but you're going to see it disproportionally…

And then, just a very quick follow-up on your incentive management fees. There seems to be some headwinds in 2013, the IMS were pretty flat. What are your expectations for '14; it should be a tailwind in '14?

Yes, I think listen what's going on in '13 is just some year-over-year comp issues at the -- we had some contracts that were sort of changed and one in particular, a very big one in Mecca that distorted what was going on with incentive management fees. It obviously -- it's a very positive thing for the company. We restructured an existing agreement and changed the incentive management fee arrangements and returned for I think 4500 new rooms that were doing with this developer in Mecca over the next -- that will be opening over the next three or four years, so a very positive thing, but it distorted the IMS. This year, IMS growth was going to be sort of in the 8% to 10% range. I'd say that's sort of the beginning of a very nice trajectory in the sense that if we look at what we have under construction around the world a 102,000 room, 75%, 80% of those are international the vast majority of those are sort of in the full service and luxury space, almost every one of those have incentive management fee contracts. For the record they don't stand behind on our priorities, those are the really good kind. And as we deliver those hotels into the system -- and obviously they are under construction, so that will be happening fairly rapidly, you will start to see a very nice trajectory of growth and incentive management fee. So the 8% to 10% that you see this year should be over the next couple years ramping up the 20% plus growth in IMS.

Your next question comes from line of Carlo Santarelli with Deutsche Bank. Your line is open.

Just a quick follow-up on Kevin's comments earlier. When you talk about the Hilton Hawaiian Village deal, when you think about the broader portfolio, how many more opportunities do you guys think there are that are similar in scope and similar in nature to this?

I'd say listen, we're working on it every day and we -- as you can tell from the Hawaiian Village description it's not like we woke up yesterday and said hey here is an idea, I mean it took us probably three-and-a-half years to get the entitlement, to be able to turn that loading dock into a 400 plus unit tower in on Waikiki Beach. And so we've been working on some of these. I'd say we clearly have a handful of these types of opportunities that are sizeable, I don't want to say it's this -- but that are meaningful sort of NPV value to the company. I mean the truth is we have a big real estate portfolio. So we have dozens and dozens of opportunities in that portfolio to create value in every way from an operating point of view and smaller value enhancement opportunities. But the big one, there is probably a handful. There is a Hawaiian Village there; a number of things in New York and our biggest assets is the New York Hilton at the Waldorf Astoria, other assets in Hawaii, like Waikoloa potentially in London with the Park Lane and some others. We don't want to get ahead of ourselves. Those know me from my prior days as a Public Committee CEO. We would rather do it and then market it rather than market it and then do it. So we are very pleased to be able to announce the Hawaiian Village deal because it's done. We have got great progress on all of the others that I just mentioned. And I think you should expect to continue to see some good progress from us on all of those.

And then, if I could just one follow-up. I know you guys mentioned earlier index, RevPAR index, in terms of kind of share in the U.S. not so much from a development standpoint, more so from an operational standpoint, where do you guys see yourself taking it from not may be a specific competitor but within the segments, where do you guys see yourselves most kind of outpacing?

That's always the question that we get and the truth in the matter is we don't ever really know because we know what's happening, otherwise which travel works, right. We know what's happening with us, we don't really know exactly what's happening with anybody else the way the system works. My sense is, and this is going to sound sort of like the obvious answer, it's a little bit of everywhere. I do think that for all the reasons I talked about, when I talked about innovation and I talked about honors and what we're doing in distribution and then what we're doing on online and mobile and e-checking and all these things, I think they suggest that the bigger, more powerful global brand are getting stronger. I'm not saying we're not taking some share from our big global competitors. I hope and my guess is we are a little bit, but I would guess, is sort of, without knowing very specifically, I would guess that more of the share is coming from the independent and the smaller regional and local players. So a little bit everywhere but may be a little bit more from there.

Your next question comes from the line Steven Kent with Goldman Sachs. Your line is open.

So two questions, first, just on debt any guidance on using free cash flow for may be an accelerated debt paydown in 2014 and linked to that your asset sales, your willingness to sell hotels any additional color on the target, the number of hotels you'd like to sell in 2014. How many are actually actively being marketed? And then, so I think to Carlo's question just a moment ago on timeshare inventory how do you balance selling your own versus selling somebody else's inventory? Obviously selling somebody else's inventory is almost like infinite return on investment or pretty close to it. On the other hand leaving assets on your balance sheet, it leaves your own assets on your balance sheet. So I'm trying to get a sense for how you're balancing that over the next couple of years?

I'll take the second and third and may be ask Kevin to then talk about the debt side of it. So on sales we have -- we do not have a lot that we intend to sell in 2014. We do have a few what I'd describe as dribs and drabs, very small assets, a few in the UK that we've been working on. But would be I'd view it as given our scale the minimus. And the reason for that is I said it in my prepared comments that the short version of it is listen we think we're in a sweet spot of the ownership cycle. We like what's going on in those assets. We love what's going through that that portfolio is really very heavily influenced by the group business which is coming back. We just invested huge amounts in over $2 billion over a period of time and in the assets we're getting the benefit of that. We got these value enhancement opportunities that we want to mind and we haven't been able to mind, not because we didn't know how to do it but because our debt structure really didn’t allow us. So our attitude right now is other than as I say some very minor sales, which would be immaterial to really try and mind the value of this. Over time as I said if we believe that there's an opportunity to create incremental shareholder value by doing something with some or all the real estate, we will not be shy about that. The likely way that we would do it would be really more in a sort of structured format, wouldn’t have to be all of it, but it might be in very large chunks of it to make sure that we create…

Yes, Steve for the debt question, Chris mentioned $700 million to $900 million of cash available or free cash flow. We would use the entirety of that to repay the term loan. The term loan is floating rate. It's fully pre-payable with no questions. So it's our most efficient debt to repay. And our goal would be to continue use the LION share of our free cash flow to repay debt, but with goals of being investment grade and we think we can achieve that over the next two to three years. We finished the year at 5.2 times net debt to EBITDA. We think we will finish -- if we do that $700 million to $900 million we will finish 2014 in about 4.50 times.

Your next question comes from line of Felicia Hendrix with Barclays. Your line is open.

Hi, good morning it's actually Anthony Powell here for Felicia. How are you?

Hey, Anthony, how are you doing?

How are you doing?

Doing well. On supply growth there seems to be some supply growth in the focus service segment in the U.S. Do you see hitting the supply impacting some same store RevPAR trends at your focus service hotels in your portfolio?

What I would say is, I mean clearly, there is a little bit more supply coming. If last year, really get the aggregate data, it was sort of a little below 1%. We think this year it is going to be over 1%. Next year, probably if you look at all of the lead numbers, what's in the pipeline that will get under construction, it's still probably in our mind 1.5%, that's again a 30-year average of 2.5%. So at least over the next sort of two to three years we think it's very muted. We think really in terms of what we see going on, there is quite a bit of discipline in the market. There is money to develop but there's not a lot and it's only with the best developers that it's really getting done and the best brands. Thankfully for us, I think we're viewed given the market share premiums we have as being amongst the best if not the best in that category. So as I said, we got 25% of what is under construction, and we only have 10% or 11% of the existing supply. So we feel pretty good. I don't think -- we don't that there is material impact from it until you get much higher in the supply cycle. So I pick a number, I mean historically, I think you got to get up to 2% or getting up closer to the 30-year average, I think it's probably is the time we have to start to think about it. But we were closer to one then we are two or even one-and-a-half, I think we feel very good about it. And the fact is, demand should be growing and at a little bit faster pace in the U.S. because I think everybody would say -- and now with the government noise behind us at least for this year probably at least a couple of years, that you're going have better GDP growth which is going to drive greater demand growth in an environment where there is still tiny tidy pickup in supply when you look at the aggregate numbers.

And one follow-up. Do you see any opportunities to add new brands to your portfolio? Thank you.

The answer is yes, I did a very crazy job of alluding to that and I apologize for that. As I said, my sort of style those of you know me know what is like -- we want to do things and then market them for you guys and everybody else. So we do have a bunch of ideas. Right now, we're dealing as we talked about with Garden Inn with Embassy in China and a lot of our brands, the existing brands. We are being very strategic about how we deploy those and how we enter various markets and launch those in various regions of the world. We do have some things that we are working on in terms of both new brands and potentially what I would describe as brand extensions of an existing brand. And I do expect sort of over the next two or three or four quarters that you're going to hear at least a couple of things from us in that regard. One, which I know everybody, loves to talk about in the boutique space, which I did ask probably more than any other question on earth and even though you didn't ask it, I will certainly answer it. We are definitely working on a concept there. We have a little different view, which I will wait to explain may be on -- in the next -- a call or two out, but we have had and continue to have a little bit of reviews and our competitors or many of our competitors about how to do that and sort of what exact -- what it looks like, what price point it ends up at. We've done a ton of work, we are getting closer I would hope in the not too distant future we can -- you'll be hearing from us on that. That would probably be the first thing or amongst the first things that you would hear.

Your next question comes from line of Joshua Attie with Citi. Your line is open.

As we think about the 5% to 7% RevPAR guidance, what are the variables that put you at the high and low end? Is it the performance of group business, is it your ability to drive rate or are there markets that are question marks? And I know there are probably multiple items that influence your thinking, but where do you think the main levers are to the upside or downside or the biggest question marks in your mind as you think about this year?

Yes. Listen, I think getting to the higher end would depend on the things you alluded to, that the continued strength that we've seen in transient, which has been strong. But we assume if you want to get to the higher end of that then you would have to have at or maybe even a little bit above sort of where the transient growth was. You need the group to show up, the group business to show up the way that the way that we're hoping and we think there is potential for that. And probably I'd say you need nothing big to go wrong in the world. Right, I mean the problem whether there is upside and downside of being a very big globally diversified company that ultimately when Egypt is a problem more if when Japan is strong it's great, if Japan is weak they can drag you down. So I think -- I don't listen, I don't think it's -- I believe that we're pretty upset, we gave a range for a reason because it's a big company, a lot of things can happen around the world. We think that at the upper end of that range, it's possible or we wouldn't give you that range and I think it depends on those things. Continued slight uptick in transient, definite uptick in group, and so a nothing major going wrong around the world.

And I know you don't want to give too many details on projects until they're finalized, but can you talk broadly about your thoughts on the Waldorf in terms of a potential redevelopment?

Yes, we have spent a lot of time and some money as you can see if any of you have been to the Waldorf, we've spent over the last five or six years about $175 million and some of that's sort of behind the wall, so you don't see it. Some of it is upfront, I mean, we've been working on the exterior of the building to do the work that needed to be done for about a 100 years. We did -- we have redone the Park Avenue lobby, the motor court. If you haven't seen I mean, amazing progress and done a lot of work to figure out sort of from a rooms point of view what we want to do. We have not taken that next step, because we've been in the process of doing -- excuse me a whole bunch of work and analysis around what's the highest and best use would be from a -- from standpoint of maximizing the value to the shareholders of the company and there are a bunch of different ways to do that and there a bunch of different people, we could do that with recognizing that not to coy that we talk a lot about capital light, obviously it's really complete what we like to have at the Waldorf, certainly it would require a lot of capital. So I would say to you by the end of this year hopefully sooner, we will be in a position to layout exactly what we think the plan is to the Waldorf both in terms of what we're going to do with it physically and who we might do it with in order to continue to focus on our being capital light. And I'm sorry to be coy, again we're just in the middle, we've done a kind of work over a bunch of years, we're sort of in the middle of completing that work and I don't think it's going to be too far out before we can give you good sidelines. We will fix the Waldorf that I will tell you and there a couple of different sort of major pathways to doing that and we're finishing the work to be able to conclude that.

This concludes today's Q&A session. I will turn the call over to our presenters for any closing remarks.

Well, thanks everybody. Listen, I said a couple of times, it's great to be back, it took us six year hiatus from the public market, but after 50, I think consecutive earnings calls it's nice to be back doing quarterly earnings calls. We are obviously very pleased with our results for 2013, both the fourth quarter full year. We feel great about the environment, very optimistic about 2014, and we will look forward to giving you an update after we complete our first quarter. Thanks again for spending the time with us today.

This concludes today's conference call. You may now disconnect.